AIG shares fall as Sandy claims hit $2 billion

GregMorcroft

NEW YORK (MarketWatch) — Shares of American International Group Inc. shed 2% and were among the top financial-sector decliners on Monday after news that the insurer’s losses from Hurricane Sandy were more than expected.

The hurricane liability news trumped what would otherwise have likely helped the stock
AIG, +0.28%
, namely the news that the firm has agreed to sell a controlling stake in its airline-leasing unit to a Chinese consortium for several billion dollars.

Analysts at UBS said AIG’s $2 billion pretax estimate for losses tied to Sandy came in at double their expectation.

AIG also said on Monday that it plans to sell an 80% stake of its International Lease Finance Corp. unit to a group of Chinese financial-service firms for $4.2 billion, the insurance conglomerate said late Sunday. ILFC runs a fleet of more than 1,000 jets for 177 airlines as the second-largest leasing company after General Electric Co.’s
GE, -1.68%
Gecas unit by assets.

The buyer is an investor group comprising New China Trust Co. Ltd., China Aviation Industrial Fund and P3 Investments Ltd. The group will hold an option to buy up to 90% of ILFC for $5.3 billion.

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